Life insurance for doctors: What cover do you need?

Doctors can be exposed to a number of unique risks at work. Some risks, such as needlestick injuries, will not be covered by all life insurance policies.

Canstar spoke to certified financial planner Lance Cheung to give you an idea of the type of life insurance cover and features doctors may want to have. Mr Cheung is the founding director of Parinity, a boutique financial planning firm that provides advice to medical professionals.

What should doctors consider when taking out life insurance?

There are four products that typically fall under the life insurance umbrella: death cover, total and permanent disablement (TPD) insurance, trauma insurance and income protection.

The policy features and benefits you may want to consider will depend on the type of life insurance cover you are looking for, Mr Cheung said.

Blood borne disease cover

“The main [benefit] that is pretty common for doctors and nurses is a blood borne disease benefit,” Mr Cheung said. “This can be added to income protection policies and some trauma and TPD policies.”

A blood borne disease benefit, also known as a ‘needlestick benefit’, provides a payout if you acquire a blood borne disease like HIV, Hepatitis B or Hepatitis C during the course of your work.

Not all policies have this benefit option. For example, Mr Cheung said it is generally not available for policies that are held within super. You may want to speak to your insurer to see what options are available to you. You might also want to seek financial advice if you need it.

Own occupation TPD cover

If you decide to take out TPD cover, it may be beneficial to take out an ‘own occupation’, rather than an ‘any occupation’, policy. TPD insurance with an ‘own occupation’ definition provides you with a payout if you become totally and permanently disabled due to an illness or injury and are unable to work in your job.

“‘Own occupation’ can be quite valuable because you can still get a payout if you can’t do the speciality you used to be able to do, but you can still work in your profession as a general medical professional,” Mr Cheung said.

“It doesn’t stop you from going and becoming a GP or consulting. This is opposed to trying to claim on ‘any occupation’, which means you can basically never work again.”

To receive a payout under the ‘any occupation’ definition, you will typically need to be unable to work in any capacity in any occupation suited to your education, skills, training or experience.

Business expenses insurance

If you are running your own practice, you may also want to add business expenses insurance to your life insurance. This is similar to an income protection policy for your practice, Mr Cheung explained.

“For example, for a dentist, you might have dental nurses or admin staff who still need to be paid. If you are not generating income that can be an issue,” Mr Cheung said.

Business insurance can cover certain business expenses while you are totally disabled. This can include employee salaries.

Future increase benefit

As your income is likely to increase as your career advances, you may want to get cover that allows you to make large cover increases without needing to undertake medical tests.

“For a lot of the more robust income protection policies, if you have the future increase benefit built-in, [you will be allowed] to increase your monthly benefit by up to 15 per cent per annum,” Mr Cheung said.

“So if someone was on a $100,000 income one year and their income goes up, they can increase that coverage up to $115,000 the next year without any additional medical underwriting.”

This benefit will generally be available in advised policies. However, it may be available in some direct policies. Again, it can be a good idea to speak to your insurer or seek financial advice to see what options are available to you as a doctor.

If you’re comparing life insurance policies, the comparison table below displays some of the policies currently available on Canstar’s database for a 30-39 year old non-smoking male working in a professional occupation. Please note the table is sorted by Star Rating (highest to lowest) followed by provider name (alphabetical) and features links direct to the providers’ websites. Use Canstar’s life insurance comparison selector to view a wider range of policies.

Main image source: Jacob Lund (Shutterstock)


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